Thai growth outlook below potential, but no crisis yet - central bank governor

By Kitiphong Thaichareon

 

FILE PHOTO: The logo of Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva

 

BANGKOK (Reuters) - Thailand's economic growth forecast of 2.8% for this year is below potential and monetary policy will be reviewed if conditions worsen, the central bank governor said on Monday.

 

While the Bank of Thailand downgraded the 2019 growth outlook last week from 3.3%, the economy is "not in a crisis yet," BOT Governor Veerathai Santiprabhob told reporters. Last year's growth was 4.1%.

 

"If economic conditions differ from our forecasts, we are ready to review monetary policy and to use tools," he said.

 

Last week, the BOT's monetary policy committee (MPC) left the benchmark policy rate <THCBIR=TH> unchanged at 1.50%, after August's surprise cut, the first easing since 2015.

 

The MPC will next review monetary policy on Nov. 6. Some analysts expect a further rate cut by the year-end.

 

Veerathai said August's rate reduction was pre-emptive, taking into account slowing economic growth and the outlook downgrade.

 

Southeast Asia's second-largest economy grew just 2.3% in the second quarter, the weakest annual pace in nearly five years, as exports slumped.

 

The central bank is worried about the strength of the baht <THB=TH>, driven by the country's hefty current account surplus and higher foreign direct investment, Veerathai said.

 

In the first seven months of this year, Thailand recorded a current account surplus of nearly $20 billion, due to slow investment, he added.

 

However, the BOT has found very little speculation in the baht following the bank's measures against it, Veerathai said, adding stock and bond portfolios currently showed net outflows.

 

The baht is Asia's the best performing currency this year, up about 6.5% against the U.S. dollar.

 

-- © Copyright Reuters 2019-09-30

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15 hours ago, snoop1130 said:

Thailand's economic growth forecast of 2.8% for this year is below potential and monetary policy will be reviewed if conditions worsen, the central bank governor said on Monday.

I still think that is 2.8% above reality

16 hours ago, snoop1130 said:

"If economic conditions differ from our forecasts, we are ready to review monetary policy and to use tools," he said.

 

Using tools to do politicians work is the main problem !

Thailand just need a more competent government and a capable Prime Minister. Really a wrong government at the wrong time.  

16 hours ago, snoop1130 said:

Southeast Asia's second-largest economy grew just 2.3% in the second quarter, the weakest annual pace in nearly five years, as exports slumped.

Thailand's lowest growth rate since the year of the coup. Well done Khun Prayut Chan-o-cha. 

16 hours ago, snoop1130 said:

the economy is "not in a crisis yet,"

Best to wait for it to be in a crisis.  

Gotta wonder how many of them benefit in some way, from the ChiCom hot money inflows...